BSNL Lost Rs 15,500 Crore This Year, Will Govt Shut It Down? Here’s Official Reply From Minister

 Since over a year, we have been covering every piece of movement in relation to privatisation of BSNL and MTNL.

In its recent Lok Sabha meeting on Wednesday, the Minister of State for Telecom Sanjay Dhotre disclosed Government’s intentions of reviving the loss making telcos, thereby doing away with any news of closing down the public sector firms.


Government’s Revival Package for BSNL & MTNL

In October 2019, the government announced a revival package of Rs 69,000 crore for the two loss making telcos.

This revival plan included cutting down employee costs by providing a voluntary retirement scheme (VRS) for employees over 50 years of age, allotment (administrative) of spectrum for 4G services with funding through budgetary allocation, along with raising sovereign guarantee bonds by restructuring debt.

You can read all about the VRS plan of BSNL here.

As reported, the revival package also makes way for monetisation of assets so that resources could be generated for retiring debt, capital expenditure and other requirements; all of this to establish a successful nod for BSNL-MTNL merger.

Monetary Plans Assigned for Debt Revival of Two Telcos

Assuring Government’s intentions of not shutting down BSNL or MTNL, Dhotre informed that about 78,569 BSNL employees and 14,387 MTNL employees opted for VRS, which reduced BSNL’s salary expenditure by 50%, while that of MTNL reduced by whopping 75%.

The government has allotted Rs 16,206 crore to meet the total funds requirement for ex-gratia on VRS, of which a sum of Rs 14,890 crore has been released only for BSNL and MTNL.

Additionally, Dhotre has also informed that the government has incurred an expenditure for Rs 1,952 crore on account of incremental pension till December 21, 2020.

Sovereign guarantees of Rs 8,500 crore has been provided to BSNL by the government, while for MTNL, the amount provided is Rs 6,500 crore.

Dhotre added, “BSNL has informed that it has been able to generate Rs 241.87 crore from monetisation of land/building assets since announcement of revival package.

Total allocation of Rs 24,084 crore for spectrum for 4G services was made in FY 2020-21. Due to a delay anticipated in launch of 4G services, the funds are being re-allocated in financial year 2021-22.”

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